Economy sets sail to the unknown as UK votes to exit the EU

Economy sets sail to the unknown

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Commenting on today’s EU referendum result for the UK to leave the European Union, Yael Selfin, Head of Macroeconomics, KPMG UK, said:

“The Brexit vote will see the UK economy navigating in extremely turbulent waters over the coming months, as the initial shock waves touch all parts of the UK economy and reach much further afield.

“In the short term, the thick fog of uncertainty will make it hard for businesses to plan beyond the immediate horizon, while the price of a journey with yet unknown destination will take a heavy toll on the economy. We could see UK GDP growth, at a minimum, 0.5% to 1.5% lower on average than if the vote had gone the other way.

“In the longer term, a lot will depend on the path the UK succeeds to carve for itself whether it chooses to sail the seas alone or manages to join a flotilla of like-minded others to make its prospects stronger. However, the economic impact will be significant under most outcomes, with UK GDP potentially 4% to 6% lower by 2031 than if the UK voted to remain in the EU.

“Businesses need to reassess priorities and adjust for fresh realities in terms of new tariffs and other trade restrictions, pressures on wages and labour availability, and a deterioration in public finances.”

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